1. Cuiabá Integrated Energy Project
Central Bank Indemnity
CB Indemnity - Covers:
Disallowance of US$ Accounts (either onshore or offshore)
Disallowance of F/X for cross guarantee among 3 borrowers
US$ Accounts
contracts realigned to minimize exposure to 5 days of devaluation exposure or less (Lenders considering accepting this risk but more time needed to get Hermes consent)
devaluation of liquidation proceeds or an offtaker termination payments
Cross Guarantee indemnity
Cross collateralization can occur at Cayman level and Brazilian Borrowers pre-aaproved to move distributable cash to Caycos, (thus mitigating issue in most cases)
Indemnity only applicable to amounts actually held by Brazilian Borrowers (includes actual receipt of any termination payments)
Lenders required to pursue CB appoval prior to requesting indemnification
Lenders not covered if general exchange moratorium exists
Reais released to sponsors when US$ support provided
Dec 4, 2000

2. Cuiabá Integrated Energy Project
Enron Standby Fuel Arrangements
Purpose
YPF Contract terminates if CP’s not met by May 4, 2001
Government Approvals for 20 year export by Bolivian affiliate not expected prior to May 4, 2001
Government Approvals are CP for our financing
Structure
Enron provides for fuel requirements until May 4, 2001
If YPF contract terminated, Enron has one year to arrange replacement supply while acting as interim supplier and having traditional performance LD’s
If unable to arrange acceptable replacement by May 4, 2002 then back-up obligation converts to a debt guarantee and Enron has an additional year to arrange acceptable replacement
Justification
YPF Contract is currently US$.40 / mmcf out of the money
Since YPF contract negotiated over [6 TCF] of gas discovered in Bolivia
Creates exclusive preferential option for Enron to capture US$.40/mmcf on 50% of Cuiaba I supply if YPF falters
Recapitalization occurs after 12 months if debt guarantee triggered (Enron foreclosure as remedy for failure of sponsors to participate)
Dec 4, 2000

3. Cuiabá Integrated Energy Project
Gas Price Differential Agreement
Purpose
Prevents TBS non-payment resulting from EPE fuel payments not exceeding YPF price.
Structure
Enron & Shell provide floor through loan maturity (15 years)
Justification
Enron & Shell capture value of in the money contract
Avoids Enron & Shell wrap of YPF and transporter obligations
Keeps upside benefits from flowing to Furnas under Economic Equilibrium
Dec 4, 2000

4. Cuiabá Integrated Energy Project
Liquidity Facility
(previously approved)
Purpose
Liquidity for delays in obtaining economic equilibrium adjustments
Structure
Drawable
Justification
Condition for lender involvement since US$ indexing not available in Brazil
Dec 4, 2000

5. Cuiabá Integrated Energy Project
Dec 4, 2000

6. Dec 4, 2000